Renters struggle with rising costs – but dream of home ownership

The UK’s renters are facing increasing financial pressures, with more than half (51%) pointing to escalating property prices as a major obstacle to homeownership, according to Barclays.

The number of tenants struggling to save for a deposit (44%) has also risen since December.

Despite these challenges, 23% of renters aspire to buy a property by 2030, with 31% actively saving.

Barclays Property Insights also reveals that January saw spending on rent and mortgages rising by 2% compared to January 2024.

The bank’s managing director of mortgages and savings, Sian McIntyre, said: “The start of 2025 saw a slight increase in mortgage and rental spend, though encouragingly this hasn’t knocked consumers’ confidence in their ability to make payments.”

The survey also found that 21% of tenants say they’re thinking of moving to a more energy efficient home.

Property market confidence has waned

Barclays says that property market confidence has waned due to increasing house values and forthcoming stamp duty rises.

Just 24% of those polled expressed optimism in the market’s future, a six-month low.

Future interest rate rises remain a key worry for respondents, with 61% highlighting this concern, a slight drop from December’s 62%.

Impact of lower rates

The bank says that the Bank of England’s recent interest rate reduction to 4.5%, the third in six months, offers potential benefits for aspiring homeowners.

However, this change has limited impact on most existing mortgage holders.

Nearly three-quarters (72%) of those surveyed have fixed-rate mortgages and won’t experience these reductions until their terms end.

For those whose fixed rates expired in the last year, 59% reported an average increase of £2,912.40 annually, or £242.70 monthly, upon renewing.

Conversely, only 10% have seen lower monthly mortgage expenses.